COMMISSIONER OF INCOME TAX vs. DR.K.NEDUNCHEZHIAN

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TCA/247/2024HC Madras30 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court did not adjudicate on the substantial questions of law. Instead, the appeal was dismissed due to low tax effect, as per CBDT's Circular No.9 of 2024 dated 17.09.2024. The Court recorded the submission by the learned Senior Standing Counsel for the appellant Revenue that the tax effect was below the monetary limit prescribed for filing appeals. Consequently, the appeal was disposed of, keeping the substantial questions of law open for adjudication at a later stage. No order as to costs was made. The specific findings of the ITAT or the reasoning behind the deletion of additions by the ITAT were not discussed or analyzed by the High Court in this judgment. The operative direction was to dismiss the appeal for low tax effect.

What were the facts?

The Revenue, Commissioner of Income Tax, Central Circle-1, Salem, filed a Tax Case Appeal before the High Court of Judicature at Madras challenging an order of the Income Tax Appellate Tribunal (ITAT), 'D' Bench, Chennai, dated 25.05.2022 in I.T(SS)A No.5/Chny/2006. The appeal concerns assessment year(s) not explicitly stated but implied to be related to a search and seizure operation (Section 132(4) statements and affidavits). The core dispute involves additions made by the Assessing Officer concerning investments in sand quarrying, which were allegedly in benami names of an Association of Persons (AOP) and its members, and the assessee's subsequent retraction of statements made under Section 132(4) and affidavits. The procedural history leading to this appeal is the ITAT's order which deleted these additions.

What were the issues?

The Tribunal had to decide three substantial questions of law: 1. Whether the ITAT was correct in deleting additions made on investments in sand quarrying, which were allegedly in benami names of an AOP and its members, especially when the assessee had confessed to this under Section 132(4) on 12.12.2002. 2. Whether the ITAT was correct in not considering the evidentiary value and veracity of affidavits declaring undisclosed income, voluntarily furnished on 18.12.2002 by the assessee and third parties, which were supported by their statements under Section 132(4) on 12.12.2002. 3. Whether the ITAT was correct in shifting the onus onto the department without considering the assessee's failure to provide material evidence to support his retraction against primary evidence like his sworn statement under Section 132(4) and voluntarily filed affidavits. Assessee's Contention: The judgment does not record specific contentions made by the assessee before the High Court. The ITAT's decision, which deleted the additions, implies the assessee successfully argued against the additions before the Tribunal. Revenue's Contention: The Revenue argued that the ITAT erred in deleting the additions, highlighting the assessee's confession under Section 132(4) and the subsequent affidavits as primary evidence. The Revenue contended that the ITAT wrongly disregarded the evidentiary value of these documents and improperly shifted the onus onto the department.

Which sections of the Income-tax Act were involved?

Section 260A,Section 132(4)

AI-generated summary — verify with the full judgment below

T.C.A.No.247 of 2024 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.10.2024 CORAM THE HONOURABLE MR.JUSTICE R.SURESH KUMAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN T.C.A.No.247 of 2024 The Commissioner of Income Tax, Central Circle-1, Salem. ... Appellant -Vs- Dr.K.Neduchezhian ... Respondent PRAYER : Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal 'D' Bench, Chennai dated 25.05.2022 in I.T(SS)A No.5/Chny/2006. For Appellant : Mrs.R.Hemalatha Senior Standing Counsel J U D G M E N T (Judgment of the Court was delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Chennai by raising the following substantial questions of law: 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.247 of 2024 1. Whether on the facts and in the circumstance of the case the ITAT was right in deleting the additions made on investments made on account sand quarrying which is in benami nature of AOP's and its member who exist only on paper and investment in their names belong to the assessee as confessed by the assessee u/s.132(4) on 12.12.2002? 2. Whether on the facts and in the circumstance of the case the ITAT was right in not considering the evidentiary value and the veracity of the affidavits declaring the undisclosed income voluntarily furnished on 18.12.2002 by the assessee as well as by the third parties which themselves are supported in turn by the statements deposed by them on 12.12.2002 under Section 132(4) of the Income Tax Act? 3. Whether on the facts and in the circumstance of the case the ITAT was right in shifting the onus on the department without deliberating the failure on the part of the assessee by not furnishing any material evidences in support of his retraction against the primary evidences being his sworn statement deposed u/s.132(4) of the Income Tax Act as well as the affidavit voluntarily filed by them? 2. It is brought to our notice by the learned Senior Standing Counsel for 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.247 of 2024 the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit imposed and therefore, the appeal can be disposed of, keeping the substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. Recording the aforesaid submission made by the learned Senior Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. However, there shall be no order as to costs. (R.S.K., J.) (C.S.N., J.) 30.10.2024 (1/2) NCC : Yes / No Index : Yes / No Speaking Order : Yes / No vji To The Income Tax Appellate Tribunal 'D' Bench, Chennai. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.247 of 2024 R.SURESH KUMAR, J. and C.SARAVANAN, J. vji T.C.A.No.247 of 2024 30.10.2024 (1/2) 4/4 https://www.mhc.tn.gov.in/judis

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